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Buy or Lease Tech Equipment? Ask Leonardo DiCaprio

By William Vogeler, Esq. on September 07, 2017 6:57 AM

Leonard DiCaprio can't afford to buy his party yacht -- fully equipped with three swimming pools, a gym, fitness hall, cinema, and helipad.

DiCaprio, who is reportedly worth about $245 million, rented the $678 million "Topaz" to party with his friends. What's a guy to do when he can't buy everything?

To lease or buy, that is the real question. It's as true for the rich and famous as it is for the law office manager, especially when it comes to tech equipment.

Lease Pros

There are good reasons to lease rather than buy. If you've ever leased a car, the dealer explained it to you:

  • No big down payment
  • Lower monthly payments
  • Easy end-of-term exit

When you're talking tech, you should also realize it will:

  • Always be up-to-date
  • Not cost for tech service and support
  • Keep up with the Jones & Joneses 

Lease Nos

You typically pay more to lease than to buy, although tech equipment invariably becomes obsolete in either case. So it's about deductions, expenses, amortization and other ways to adjust the relative costs.

But the real problem in the fast-changing tech world is that businesses change, too. Will the technology change? Will your business model change?

If you've made the cost-conscious decision to lease tech, then the smart money says to put your legal skills to work on the lease agreement. For example: an operating lease is generally better for small business; a fair-market option is usually better than a buy-out; early termination options can save money.

Leo's people probably did all that for his party yacht. Or not.

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